US: Democrats scramble as Biden weighs 'deep cuts' in $200 bn housing aid on spending bill

Democrats and the US House Financial Services Committee advocates on October 22, Friday scrambled about the fate of US President Joe Biden’s $3.5 trillion economic agenda slated for cuts in its housing funding to roughly a third of the initially proposed amount of $200 billion. One of the largest ‘build back better’ spending packages in US history struggled with internal lawmakers’ division over a final amount for the housing aid as centrists demanded to slash the size of the spending bill. House negotiators proposed to lower the housing costs by at least two-thirds; down to an estimated $100 billion as the White House refused to approve funding above $150 billion. 

Democratic lawmakers and White House officials, according to several reports, are now dwindling somewhere between $150 billion and $175 billion housing aid on President Biden’s ambitious American rescue plan, three sources familiar with the development reportedly stated. 

Still, up for debate, the housing aid cut is expected to be one of the major on the $2 trillion social spending package from the initial amount of $327 billion that was tabled earlier this week. While the House Financial Services Chair Maxine Waters (D-Calif) strongly opposed the housing fund 'deep cuts,' a range of advocates urged that more than $300 billion affordable housing plan must be slashed altogether from the $3.5 trillion 'Build Back Better' proposal.

Democrats had announced this week that they were reworking Biden’s overhaul package to a ‘smaller’ one, and were considering slashing the funding for the social services and climate change programs and incorporating new taxes for the wealthier to transform the package into a more appealing one for the American citizens. “We have a goal. We have a timetable. We have milestones, we’ve met them all,” House Speaker Nancy Pelosi told a White House briefing. 

Rep. Maxine Waters (D-Calif.) Financial Services panel’s chairwoman, meanwhile, questioned the amount cut stressing that ‘housing is foundational’ and that the US “cannot build back better without investing in nation's crumbling housing infrastructure,” as the House struggled with the bill’s housing provisions and assembling a final bill to revive the American economy and infrastructure. Even as Democrats planned to expand Medicare, hike taxes on the wealthier stratum, and boost federal programs for the working middle class and low-income families, the internal quarrels linked to investments in public housing have curtailed the legislative pace of the bill. 

As the centrists such as Sen. Joe Manchin (D-W.Va.) attempted to cut the overhaul package, progressives fought to preserve the housing aid proposed originally in Biden’s $3.5 trillion plan, arguing that they envisioned the initial amount would adequately support public housing repairs, rental assistance, and down payments.

Biden, meanwhile, during a White House meeting with lawmakers on Tuesday this week tried to salvage the housing aid to $100 billion, further deepening tensions and resistance, Capitol Hill aides confirmed in a Politico report. It is being speculated that the final bill could entail close to $65 billion for the public housing repairs, down from $80 billion in the original spending bill, a congressional aide familiar with the developing framework told the US networks. Of this, the official said on condition of anonymity, $40 billion might be needed for the New York City Housing Authority alone. 

Joe Biden's 'acquired' housing crisis from the Trump administration

During his presidential campaign, US president Joe Biden vowed to ease the national affordable housing shortage by introducing an 'infrastructure bill' that would curb exclusionary zoning, racial segregation, and climate vulnerability, end redlining for financially deprived Americans. As he assumed Presidential responsibility in 2021, Biden acquired the US Department of Housing and Urban Development from the Trump administration in a 'catastrophe'. This came as the Democrats planned to turn the DUH into a key central player to fight social and economic injustices and racial disparities. Since Biden assumed office, the glaring challenge for his administration has been concentrated in the underfunded, short-staffed HUD as well the unfilled or unoccupied key positions.

US President Joe Biden introduced the $2 trillion American Jobs Plan to invest $213 billion to reform the housing markets by regulating the homeownership rates and providing affordable, safe, energy-efficient, and resilient housing for Americans. This amount is estimated to be three times the Department of Housing and Urban Development's annual budget that is worth $60 billion.